Step 1: In a large microwave-safe bowl, combine the chocolate chips, peanut butter, and butter. Microwave on high for 60 seconds. Stir until smooth. If needed, microwave in additional 15-second intervals, stirring after each, until the mixture is completely melted and smooth.
Step 2: Stir in the vanilla extract until well combined.
Step 3: Add the Chex cereal to the chocolate-peanut butter mixture. Gently fold with a rubber spatula until the cereal is evenly coated.
Step 4: Pour the coated cereal into a large (gallon-sized) resealable plastic bag. Add the powdered sugar.
Step 5: Seal the bag securely, making sure there is some air trapped inside. Shake vigorously until the cereal is completely coated with powdered sugar.
Step 6: Spread the puppy chow onto a baking sheet lined with parchment paper or wax paper to cool completely. This helps the coating set and prevents stickiness.
Step 7: Once cooled and set, store the puppy chow in an airtight container at room temperature for up to one week, or in the refrigerator for extended freshness.